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A local investment firm accused of bilking clients out of more than $1.7 million is the target of a civil lawsuit filed Monday by the Securities and Exchange Commission.

Rykoworks Capital Group LLC in Brownsburg and its owner, Ryan W. Koester, 40, are named in the suit, in addition to Trafalgar insurance salesman Rudolf D. Pameijer, 61, and his daughter Lindsay R. Sayer, 32.

Without admitting or denying the allegations, Pameijer and Sayer already have agreed to waive their right to a jury trial and entered into a settlement that permanently prevents them from providing investment advice in the future. They also could be ordered to repay victims with additional civil penalties.

The SEC’s complaint filed in U.S. District Court in Indianapolis accuses the trio of committing securities fraud by misappropriating investor funds for their personal use. Pameijer used the money for luxury automobiles, a motorcycle, a 30-foot boat, his son’s college tuition, a car for Sayer and various home renovations, the suit said. It said he also used funds to pay for Sayer's wedding and her honeymoon in St. Lucia.

The suit stems from an investigation by the Indiana Secretary of State's office in which Rykoworks and Pameijer's Plan America LLC in Indianapolis had their assets frozen.

Koester, Pameijer and Sayer were not licensed to provide investment advice or to sell securities in Indiana, the securities division said.

The SEC alleges that the scheme began when Pameijer, a career insurance salesman, met Koester at a marketing event in October 2009. At the event, Koester held himself out as an expert foreign currency trader, prompting Pameijer to ultimately enter into a profit-sharing agreement with Koester for clients Pameijer brought to Rykoworks.

Pameijer and Sayer began soliciting clients in October 2010 to invest with Rykoworks through promissory notes that purported to guarantee 12-percent returns, the lawsuit claims.

“Many of the investors were unsophisticated,” the complaint said, “and some included friends and family of Pameijer.”

The largest defrauded investors were a retired scrap metal worker and his wife, who gave Pameijer $1.1 million, the complaint said.

Pameijer and Sayer transferred remaining investor funds that they did not misappropriate to Koester and Rykoworks, which Koester depleted through trading losses and personal expenses. Koester also misappropriated additional funds that he raised directly from investors, according to the SEC.

As part of the scheme, the trio provided false account statements and information to investors, the suit said.

By fall 2011, Pameijer urgently sought to raise additional funds from new investors. But Koester eventually became unresponsive to Pameijer, and Pameijer told clients that Koester had absconded with their funds, the complaint alleges.

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Olson became real estate reporter in March 2013 after spending four years as online reporter for IBJ Daily. He joined IBJ in 1999 and spent three years previously at IBJ sister publication Indiana Lawyer. Scott is an Illinois native and graduate of Western Illinois University—home of the mighty Leathernecks. He spent nearly four years at a small Illinois daily newspaper before joining The Republic in Columbus, Ind., in 1994. There, he covered the “courts and cops” beat, and reported news from nearby towns by traipsing through the hinterlands of southeastern Indiana.

In his spare time, Scott enjoys reading history books, riding bicycles, running and—most importantly—watching baseball and cheering on the Chicago White Sox. Scott also serves on the Zionsville West Middle School PTO Board. He lives in Zionsville with his wife and two daughters, along with two cats and a spoiled Chihuahua.

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